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USA Technologies v. Stokklerk

LEGAL CASE

USA Technologies v. Stokklerk

In August of 2009, Pennyslvania-based company USA Technologies filed a federal lawsuit against two Yahoo! message board posters who roundly criticized what they claim is the the consistently poor performance of USA Technologies' management. The criticism highlighted plummeting stock prices of the company, shares of which have lost over 99% of their value since their peak in 1999, as well as the high compensation rates for management of the company that has been consistently unprofitable.

In its complaint filed in August in U.S. District Court for the Eastern District of Pennsylvania, USA Technologies curiously alleges without any evidence that the anonymous online statements must have somehow been part of a "scheme" on behalf of the anonymous posters to "enrich themselves through undisclosed manipulative trading tactics" in violation of the Securities Exchange Act. The company also alleges that pointed though legal criticism of the company and its management is defamatory. Following the filing of the lawsuit, USA Technologies issued a subpoena to Yahoo! demanding that the identity of its critics be disclosed.

EFF and the law firm of Phillips, Erlewine & Given LLP are defending "Stokklerk," one of the Yahoo! message board posters, against the subpoena seeking his/her identity.

Outcome: On May 17, 2010, Judge Susan Illston granted Stokklerk's motion to quash, holding that the First Amendment protected his right to criticize the company and its officers anonymously. On June 7, 2010, USA Technologies dismissed the underlying Eastern District of Pennsylvania complaint with prejudice.

Attorney Matt Zimmerman of the Electronic Frontier Foundation in San Francisco, which represents Stokklerk, said suits such as USA Technologies' are a common tactic of companies trying to suppress criticism.

San Francisco - A federal judge in San Francisco has quashed a baseless subpoena aimed at outing an anonymous online critic of Pennsylvania corporation USA Technologies after the Electronic Frontier Foundation (EFF) successfully argued that the First Amendment shields the identity of anonymous speakers who engage in lawful speech.
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